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U.S. and China commercial property face headwinds

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China and U.S. commercial real estate markets are 'hot spots,' UOB CFO says

Commercial real estate markets in the U.S. and China are economic pain points to monitor in a higher-for-longer rate environment, said Singapore’s United Overseas Bank. But the bank remains optimistic about one key region.

“The U.S. commercial real estate remains a hotspot, especially with the low occupancy rates that we have,” Lee Wai Fai, chief financial officer of UOB told CNBC’s “Street Signs Asia.”

Vacancy rates for office buildings climbed to a record high of 18.2% in late 2022.

“The other hotspots will be China, there [are] worries about the quality and whether they can manage the property uncertainty in China,” he added.

China’s property market has struggled with faltering consumer confidence as major developers like Evergrande┬аand Country Garden remain mired in debt problems.

Lee added the world is heading into a more “uncertain environment” and the impact of higher-for-longer interest rates is starting to filter through the economy.

The world’s central banks have hiked interest rates aggressively over the past 18 months or so in a bid to rein in soaring inflation, with varying degrees of success.

“China recovery has yet to come about. And of course, the recent geopolitical tension has added to the volatility,” he added.

ASEAN’s resilience

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